60 day IRA Rollover
I have someone over 59 1/2 that has 2 IRAs and a Roth. Can he only do a 60 day rollover on one of his IRAs? Or, can he do it on both. If it’s only one, then can he combine the 2 then do the rollover?
I have someone over 59 1/2 that has 2 IRAs and a Roth. Can he only do a 60 day rollover on one of his IRAs? Or, can he do it on both. If it’s only one, then can he combine the 2 then do the rollover?
Permalink Submitted by Alan - IRA critic on Wed, 2022-07-13 19:22
Only one such rollover for all IRA types combined is allowed in a 12 month period. The two TIRA accounts could be combined by direct transfer and then the combined account could be rolled over with a 60 day rollover. However, why not save the rollover and directly transfer both TIRAs to the desired destination. A conversion, even done by a 60 day rollover does not count against the one rollover limitation.
Permalink Submitted by Stephen Hodson on Wed, 2022-07-13 20:13
He needs $$ for closing on a new house. I thought he could aggregate the IRAs – say there’s 100k in each. Can he take money from each one as long as he does it at the same time?
Permalink Submitted by Dan Zaehring on Wed, 2022-07-13 23:14
Not sure what you mean by “aggregation” but the rollover must come from one IRA account in order for the total to be rolled back in 60 days. As mentioned already, a direct transfer of funds to a single account before making the distribution would allow this.
Permalink Submitted by Alan - IRA critic on Thu, 2022-07-14 00:16
If the replacement funds are coming from the sale of another property, there is always the risk that the closing is delayed and the 60 days expires, which prevents any of the funds from being rolled back. To somewhat mitigate this risk, not only should the IRAs being combined by direct transfer, the distribution should be taken as late as possible to delay the start of the 60 day rollover period. Once the new purchase closes and the sale of the property remains pending, the taxpayer can experience a high degree of stress as the remaining time runs off.